Shimmick (SHIM) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Shimmick Corporation reported resilient Q1 2025 results with a robust backlog and strong bidding outlook, achieving significant gross margin improvement and reduced net loss while reaffirming full-year guidance Highlights Shimmick Corporation reported resilient Q1 2025 results, highlighting a robust backlog of approximately $740 million and strong bidding outlook, with improved gross margin and reduced net loss - The company's business model is proving resilient against macroeconomic factors, supported by a robust backlog and a strong bidding outlook in key sectors like water and environmental infrastructure[3] - Backlog stands at approximately $740 million as of April 4, 2025, with over 87% from Shimmick Projects. The company is reaffirming its 2025 guidance based on strong bidding activity, with nearly $2 billion in projects anticipated[5] Q1 2025 Key Financial Metrics | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Revenue | $122 | $120 | +$2 | | Gross Margin | $5 | $(16) | Improved by $21 | | SG&A Expenses | $14 | $16 | -$2 | | Net Loss | $(10) | $(33) | Loss reduced by $23 | | Adjusted EBITDA | $(3) | $(24) | Loss reduced by $21 | | Liquidity (as of quarter end) | $71 | N/A | N/A | Financial Performance Analysis This section analyzes Q1 2025 revenue, gross margin, operating expenses, and net loss, highlighting improvements driven by core projects and winding down legacy operations Revenue and Gross Margin Analysis Q1 2025 revenue increased to $122 million, with consolidated gross margin turning positive at $5 million (4%), driven by core project profitability and reduced losses from winding down legacy operations Revenue and Gross Margin by Project Type (Q1 2025 vs Q1 2024) | Project Type | Metric | Q1 2025 (ended Apr 4, in millions) | Q1 2024 (ended Mar 29, in millions) | | :--- | :--- | :--- | :--- | | Shimmick Projects | Revenue | $93 | $90 | | | Gross Margin | $5 (6%) | $(1) (-2%) | | Legacy & Foundations | Revenue | $29 | $30 | | | Gross Margin | $(1) (-2%) | $(15) (-52%) | | Consolidated Total | Revenue | $122 | $120 | | | Gross Margin | $5 (4%) | $(16) (-13%) | Shimmick Projects Shimmick Projects revenue grew by $3 million to $93 million, driven by new fire clean-up and water projects, significantly improving gross margin by $6 million to $5 million - Revenue increased by $3 million, mainly from a $13 million California Palisades fire clean-up project and $10 million from new water/infrastructure projects[9] - Gross margin increased by $6 million to $5 million, with $3 million from the fire clean-up project and $3 million from new water/infrastructure projects[10] Legacy and Foundations Projects Legacy and Foundations Projects revenue decreased by $1 million to $29 million, with gross margin loss narrowing by $14 million to $(1) million due to non-recurring Q1 2024 cost increases - The company is actively winding down these projects, leading to a $1 million decrease in revenue[11][12] - The gross margin loss narrowed by $14 million, as cost increases for time and design-related schedule extensions from Q1 2024 did not reoccur this quarter[13] - A subset of these, 'Legacy Loss Projects', recognized revenue of $18 million and a gross margin loss of $(2) million, an improvement from an $(11) million loss in the prior year[14] Operating Expenses and Other Items SG&A expenses decreased by $2 million (11%) due to reduced costs, while other financial items remained flat, and no income tax expense was recorded due to expected tax losses - SG&A expenses decreased by $2 million compared to Q1 2024, primarily due to reduced salary, bonus, and legal expenses[16] - Equity in earnings of unconsolidated joint ventures, gain/loss on asset sales, and interest expense remained approximately flat period over period[16][17] - No income tax expense was recorded in either Q1 2025 or Q1 2024 due to expected tax losses for both fiscal years[18] Net Loss and Earnings Per Share Net loss significantly narrowed to $(10) million in Q1 2025, a $24 million improvement, with diluted loss per share improving to $(0.28), reflecting substantial year-over-year progress Net Loss and EPS Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net Loss | $(10) | $(33) | | Diluted Loss per Share | $(0.28) | $(1.30) | | Adjusted Net Loss | $(7) | $(29) | | Adjusted Diluted Loss per Share | $(0.22) | $(1.15) | - Adjusted EBITDA improved to $(3) million for Q1 2025, compared to $(24) million for the same period in 2024[20] Fiscal Year 2025 Guidance Shimmick reaffirmed FY2025 guidance, projecting 10-15% revenue growth and 9-12% gross margin for core projects, with Adjusted EBITDA expected between $15 million and $25 million Full Fiscal Year 2025 Guidance | Category | Guidance Metric | Value | | :--- | :--- | :--- | | Shimmick Projects | Revenue Growth | 10% to 15% | | | Gross Margin | 9% to 12% | | Legacy & Foundations Projects | Revenue (in millions) | $50 to $60 | | | Gross Margin | (5)% to (15)% | | Consolidated | Adjusted EBITDA (in millions) | $15 to $25 | - The CFO reaffirmed full-year guidance, citing Q1 momentum and a strategy focused on Sustainable Backlog, Operational Excellence, and People and Culture[23] Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated balance sheets, statements of operations, and cash flows for Shimmick Corporation, providing detailed financial positions and performance Consolidated Balance Sheets As of April 4, 2025, total assets were $227.7 million, total liabilities $270.3 million, and stockholders' deficit $(42.6) million, with cash at $16.3 million Selected Balance Sheet Items (in thousands) | Account | April 4, 2025 | January 3, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,302 | $33,730 | | Total Current Assets | $135,762 | $141,000 | | Total Assets | $227,677 | $233,864 | | Total Current Liabilities | $210,422 | $230,264 | | Total Liabilities | $270,318 | $268,538 | | Total Stockholders' Deficit | $(42,641) | $(34,674) | Consolidated Statements of Operations Q1 2025 revenue was $122.1 million, with gross margin improving to $4.7 million, resulting in a net loss of $(9.8) million or $(0.28) per diluted share, a significant reduction from Q1 2024 Statement of Operations Summary (in thousands) | Account | Three Months Ended Apr 4, 2025 | Three Months Ended Mar 29, 2024 | | :--- | :--- | :--- | | Revenue | $122,110 | $120,043 | | Gross margin | $4,696 | $(15,860) | | Loss from operations | $(8,880) | $(31,791) | | Net loss attributable to Shimmick Corporation | $(9,770) | $(33,333) | | Diluted loss per common share | $(0.28) | $(1.30) | Consolidated Statements of Cash Flows Q1 2025 net cash used in operating activities was $38.2 million, with $21.9 million provided by financing, resulting in a $16.7 million net cash decrease and $19.1 million ending cash balance Cash Flow Summary (in thousands) | Cash Flow Category | Three Months Ended Apr 4, 2025 | Three Months Ended Mar 29, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,184) | $(34,988) | | Net cash used in investing activities | $(438) | $(7,401) | | Net cash provided by financing activities | $21,907 | $6,718 | | Net decrease in cash | $(16,715) | $(35,671) | | Cash, cash equivalents and restricted cash, end of period | $19,080 | $28,239 | Non-GAAP Financial Measures and Reconciliations This section explains and reconciles non-GAAP financial measures, including Adjusted Net Loss and Adjusted EBITDA, to their most comparable GAAP figures, providing insights into core operating performance Explanation of Non-GAAP Measures Shimmick uses Adjusted Net Loss and Adjusted EBITDA to assess core operating performance, adjusting GAAP net loss for items like stock-based compensation and transformation costs, while acknowledging limitations - The company uses Adjusted Net Loss and Adjusted EBITDA as key measures for management to evaluate core operating performance and trends[41][48] - Adjustments from GAAP Net Loss include stock-based compensation, transformation costs, legal fees for Legacy Projects, and other costs[40][47] - The company does not provide a reconciliation for forward-looking non-GAAP guidance due to the unpredictability of certain items[33] Reconciliation of Net Loss to Adjusted Net Loss Q1 2025 GAAP net loss of $(9.8) million reconciled to an Adjusted Net Loss of $(7.4) million, reflecting a significant improvement from Q1 2024, with adjustments for stock-based compensation and transformation costs Reconciliation to Adjusted Net Loss (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to Shimmick Corporation | $(9,770) | $(33,333) | | Transformation costs | $715 | $— | | Stock-based compensation | $1,790 | $998 | | Legal fees and other costs for Legacy Projects | $(340) | $2,731 | | Other | $191 | $237 | | Adjusted net loss | $(7,414) | $(29,367) | Reconciliation of Net Loss to Adjusted EBITDA Q1 2025 GAAP net loss of $(9.8) million reconciled to Adjusted EBITDA of $(3.0) million, a substantial improvement from $(24.1) million in Q1 2024, after adjusting for interest, taxes, and D&A Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to Shimmick Corporation | $(9,770) | $(33,333) | | Interest expense | $1,000 | $897 | | Depreciation and amortization | $3,460 | $4,410 | | Transformation costs | $715 | $— | | Stock-based compensation | $1,790 | $998 | | Legal fees and other costs for Legacy Projects | $(340) | $2,731 | | Other | $191 | $237 | | Adjusted EBITDA | $(2,954) | $(24,060) |